American Therapeutic Corp. Charged with Fleecing Medicare out of $200m By Using Dementia Patients

Miami has long been the country's capitol for Medicare fraud schemes, and today federal authorities arrested four people associated with American Therapeutic Corporation and charged the Miami-based company with fleecing $200 million from Medicare. The company is accused of preying on patients with severe dementia, and forcing them to go through treatment they did not need in order to inflate the amount of money it received from the government program. In some cases, owners of assisted living homes and the patients themselves received kickbacks to go along with the scheme.

Lawrence S. Duran, the company's owner, CEO Marianella Valera, and two other employees have been arrested.

The company owns seven mental health centers throughout South and Central Florida. In order to increase billing to Medicare, American Therapeutic Corp. paid owners of several halfway homes and assisted living centers to force patients living with dementia to attend therapy sessions at those centers even though they weren't necessary. In some cases the patients themselves got kick backs, though many were "not coherent enough" to demand money.

The government says doctors were told to falsify medical charts to make it look like patients had a mental illness and needed medication and therapy to be stabilized. But those patients were already stabilized or didn't require medications, according to the indictment.

The therapy is supposed to be intensive counseling for patients on the verge of hospitalization, but federal officials said ATC didn't give any counseling or brought patients in for less intensive group-therapy sessions.

Marianella Valera, one of ATC's owners, manipulated records so patients would have to stay longer at the facility racking up a higher bill for Medicare, the indictment says.

The scheme is just the latest Medicare fraud uncovered that is centered in Miami. The area is believed to be responsible for about $3 billion in Medicare fraud a year.